Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

It is pretty clear from question time today that we have a government that is not on top of the economic challenges facing this country, absolutely not on top of the issues and unwilling to debate the significant long-term challenges that we face in building prosperity well into the future. We saw today the embarrassment of the industry minister: not one question, not two questions, not three questions, not four questions, not five, not six, but seven questions, and he was mute. He could not tell us whether he had had a discussion with the members of a company, some of whom are very close to the Liberal Party, on a question that goes to the heart of our future economic prosperity: the challenge of climate change and what it means for the future of the economy.

When it comes to climate change, this government has never got it, and today you could see that it will never get it. At least the Treasurer in the past has had the honesty to admit that nuclear power is uneconomic, but he did not have the honesty to provide a submission to the Switkowski review. Was the Treasury consulted about that? No. Of course, the Treasury does not get consulted on any of these things anymore. We have a $10 billion water package which the Treasurer was not consulted on. What we have here is a government that is consumed by smugness and short-termism and is not facing up to the challenges of the future. It has no ambitious plans to build prosperity for the future. It is certainly not up to the challenge of addressing our sliding productivity, slowing growth and declining competitiveness.

It is significant that this goes front and centre to our future living standards, and future living standards are what productivity is all about. But the government is not on top of these issues, and it has been unwilling to debate these issues in the parliament. I am pleased that the Treasurer is here today, because it is time that we had a national debate on how to raise productivity in this country. Productivity goes to the core of wealth generation in this country well into the future, but if the industry minister is as hopeless as he was today, heaven help the significant industries in this country that he represents and that we need to prosper and to grow well into the future.

The Treasurer is fond of saying that we have had 10 years of prosperity and that that is somehow all the work of his good self and the Howard government. I am prepared to say that we have had 15 years of prosperity, and isn’t that a wonderful thing for this country? Let the Treasurer play politics when he says that 10 years is the length of our prosperity, but that is just the Treasurer being complacent and smug. We all know that the Treasurer is very good at claiming credit and very poor at accepting responsibility. He is quite happy to claim credit for the mining boom, but he will not fess up and admit that there are some significant challenges which are affecting future growth and prosperity in this country.

In the last six years, serious deterioration has emerged in our economic performance, and we in this parliament ought to be having a debate about that. That deterioration needs to be recognised, it needs to be explained and it needs to be addressed. But of course, we will never hear about that from the Treasurer—and we certainly do not hear about it from the Prime Minister. In his radio address on Sunday night, the Prime Minister said that the reforms of the last 10 years have given us much of the prosperity we are enjoying. We have been enjoying prosperity, but you would think that he might admit that the mining boom might have had something to do with it. You would think that he might just admit that the mining boom has given the government a bit of a hand in delivering that income boost to this community.

I am prepared to admit that the independence of the Reserve Bank has been absolutely central in our growth over the last 15 years, and that is a good thing, because it was put in place by the Labor Party. We welcome macroeconomic stability. Running budget surpluses over the cycle is important to our prosperity and growth—over 15 years, Treasurer—but that cannot continue into the future if we are not prepared to be honest enough about what is going on in our economic record. The facts are these: in the last six years, there has been a decline in some of our key economic indicators. That is six years in the last 15. The Treasurer wants to crow about 10 years; but let us have a look at what has been going on in the last six years.

In the six years to September last year, the average growth of the volume of Australian exports over 12 months has fallen to 2.4 per cent—less than one-third of the yearly growth rate over the six years from 1994 to 2000. What is significant about that? We are in the middle of a commodity boom—a mining boom. It has been raining gold bars. We are not getting the performance we really need. The average GDP has fallen to three per cent from over 3.5 per cent in the previous six years, and the growth of labour productivity in the market sector has fallen to two per cent from over 2.5 per cent in the previous six years. The growth of GDP per person, or average living standards, has fallen to under two per cent from over 2.5 per cent in the previous six years.

Over the last year, in most of these measures, we have been doing even worse than the average of the last six years. What this shows is that we have a productivity problem, and it was there for all to see in the September accounts. The September quarter national accounts show that labour productivity has failed to grow since June 2004. That is more than two years with zero productivity growth. Productivity growth actually declined by 1.6 per cent in the previous six months. This is not something that the Treasurer will talk about in this House. I await with interest the Treasurer’s response. What ambitious plans does he have to lift productivity in this community? Unquestionably, he will get up and say that he has got his extreme industrial relations reforms—which, we know, have got nothing to do with lifting productivity. He has so little confidence in his belief that it will lift productivity that he would not let the Treasury do the modelling to prove the point.

Most seriously, multifactor productivity growth, a key driver of productivity gains over the 1990s, has more than halved—falling from an average of 1.6 per cent last decade to 0.7 per cent this decade. This slowdown has seen us slip further behind productivity leaders in the global environment. The 1990s saw Australia catapult from a productivity laggard to a productivity leader, lifting our productivity performance to 85 per cent of US productivity levels. What lay behind that? One of the significant factors involved in that was enterprise bargaining, put in place by a Labor government committed to reform, committed to lifting productivity, committed to wealth creation and committed to a forward-looking agenda.

The Treasurer was in the House during question time pretending that he was the author of the modern superannuation system—which has turbocharged the Australian economy. I have been doing a bit of work on the Treasurer’s record between 1993 and 1996. Guess who opposed the superannuation system for years and years? It was none other than Peter Costello. Yes, superannuation is a fantastic reform. It was put in place by a Labor government. It is one of the great reforms that has enabled this country to face the ageing of our population with some confidence—and we are proud of it. So when the Treasurer comes in here and tells porkies about it, it leaves us a bit lost for words. There is a history of reform on this side of politics.

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